Crafts tap into fans’ thirst
Forgive the beer-drinking sports fans if they take a little longer in the beer line than they used to.
Maybe it’s the multitude of beer options or the funny names that leave them wondering, “Where did that come from?” Maybe they’re trying to determine if their favorite craft beer is still independent.
Either way, the game-day beer scene isn’t what it used to be.
Craft breweries in the United States shipped more than 25 million barrels of beer last year, an increase of nearly 200 percent since 2007, according to data provided to SportsBusiness Journal by Beer Marketer’s Insights (BMI), a trade publisher and research group for the U.S. brewing industry. And inside sports venues many crafts are generating sales that far outpace what they are earning in the general marketplace.
On the other side of the spectrum are the longtime giants of the industry, Anheuser-Busch and MillerCoors, who have seen their combined shipping totals decline by 16 percent since 2007. While they are still the big guys in the stadium, they are far from the only choice for fans at the game.
There may be no better example of these trends than in America’s heartland.
In 2009, all but one of the dozen beer brands available at Kauffman Stadium in Kansas City were brewed by A-B or MillerCoors. That one brand was Boulevard Brewing, an independent brewery located 10 miles from the ballpark. It was producing in a year what A-B was averaging every 12 hours.
Boulevard deepened its ties to the Kansas City Royals in 2015 with the Craft & Draft featuring Boulevard Brewing Co. section in a retrofitted space in Kauffman’s left field corner. The spot’s popularity enticed Boulevard to sign on as the Royals’ official craft beer partner last spring, after the club’s long-standing partnership with A-B expired. It was the first such designation by an MLB club.
Although the example of the Royals may be unusual — only a handful of teams have such a broad deal with a single craft brewer — Nick Kelly, head of A-B’s huge sports marketing portfolio, found himself in the unusual position of being the underdog when A-B’s deal with the Royals was nearing its end.
“With such a strong presence from a local brewery, it was clear to us when the renewal talks were set to begin that we would always be second fiddle,” he said.
BMI data shows that in the three years after the Kauffman Stadium craft room opened, Boulevard shipped an average of 192,700 barrels annually, an increase of about 4 percent compared to what it delivered the year before signing that deal. But sales inside the stadium fared even better.
“We basically doubled the volume in the stadium once we enhanced the partnership in 2015,” said Bobby Dykstra, vice president of sales for Duvel Moortgat USA, Boulevard’s owner.
And the increased availability of craft beers inside the stadium has helped change the ballpark’s drinking culture.
This season, for example, the team offers 14 different Boulevard beers, and only 27 of the 62 other beers sold inside the ballpark come from a major brewery, including 19 from new team sponsor MillerCoors.
Additionally, craft beers made up 39 percent of total beer sales at Kauffman last season, up from 26 percent in 2014. And with nearly a quarter of the 2018 season played, that rate had reached 47 percent, according to data provided by Aramark, the ballpark’s concessionaire.
Beginning this season, Boulevard has rights to use the team’s marks, and the initial release of its Royals-logoed ¡Vamos! Mexican-style lager right before Opening Day sold out immediately in all stores and bars where it was distributed.
“It’s a local brewery partnering with a team whose reach crosses over into six states,” Dykstra said. “It is authentic co-branding.”
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Despite the shift in fan tastes inside sports venues, A-B still shipped more beer last year than its five closest competitors combined. And Bud Light is still the most popular beer in the nation, by a long shot. But for A-B and MillerCoors, which controlled 90 percent of the distribution in stadiums and arenas just a few years ago, there is growing frustration with the position that craft beer has gained in sports venues.
What irritates Kelly and his counterparts is not so much that they have to coexist with local beers, but that for the most part, those brewers aren’t paying for the exposure benefits. “We can’t buy distribution. We can’t limit who sells what,” Kelly said. “So what’s frustrating for us is that we’re the ones paying for the marketing rights to be a partner with the team.”
Simply by having its brand poured at a ballpark gives a beer an implied connection to the team, he said, even when there is no contractual partnership. As a result, the smaller brands are getting a bigger bang at retail for their investment. “Our team deals are not about driving awareness; Bud Light doesn’t have an awareness problem,” Kelly said. “But for the local guys, being in the venue is a much bigger value proposition.”
Brewed at the ballpark
Five professional teams have a brewery connected to their venue.
Durham Athletic Park
MCU Stadium (Brooklyn)
Kelly said the amount of beer that A-B produces for sports has been flat for a few years and will likely not change. What will continue to change, he said, is the mix.
Benj Steinman, BMI’s longtime president, has been analyzing beer trends for nearly 40 years, and understands Kelly’s frustration.
“In sports, you go back to the 1980s, and Anheuser-Busch’s route to dominance was ubiquity,” Steinman said. “They essentially captured every stadium and arena deal and sports sponsorship they could find. That’s why its market share grew by almost 1.5 percentage points every year. We’ll never see anyone with those numbers again.”
At its peak in the late 1980s, Budweiser commanded a nearly 50 percent market share, he said. In 2017, the brand made up less than 7 percent of the beer distributed in the U.S., according to BMI’s data.
Over the past decade, consumers have demanded more options. “Stadium owners are coming to the table and saying to the big brewers that these deals no longer make sense” Steinman said.
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For their part, teams, concessionaires and even the beer partners are collaborating to build areas that are both better tailored to today’s beer drinkers and are designed to maximize concessions profits. The brewers are adapting their models by bringing more variety to the table. And to make that happen, they have become acquisitive.
In 2011, A-B’s newly created High End unit bought Chicago-based Goose Island. Nine more acquisitions followed, concluding with the purchase last May of Asheville, N.C.-based Wicked Weed. In September, the company announced it had laid off 90 percent of the High End sales force, roughly 380 people, indicating that its spree was complete for now.
Kelly said the plan is twofold: The brewer gave a nationwide push to Space Dust from Seattle-based Elysian (which it acquired in 2015) and Goose Island, while marketing the other eight acquisitions as regional craft beers.
Marty Maloney, spokesman for MillerCoors, said his company is following a similar blueprint. The brewer’s Tenth and Blake unit was formed in 2010 to grow the craft division and has purchased four breweries.
Southeast get crafty
While the Pacific Northwest gets much of the craft beer attention, the Southeast (see map above) has become a hotbed of sports activation.
1. Nashville Sounds (AAA)
First Tennessee Park
The 36-tap, 4,000-square-foot outdoor Band Box sells only craft beer; the ballpark’s top-selling draft is Goose Island IPA.
2. Winston-Salem Dash (A)
Foothills Brewing has naming rights to the Brewpen.
3. Greensboro Grasshoppers (A)
First National Bank Field
Natty Greene’s Brewing Co. brews and cans the team’s Going Yard Golden Ale.
4. Durham Bulls (AAA)
Durham Bulls Athletic Park
Bull Durham Beer Co. opened in 2015 as the first brewery located at an MiLB ballpark.
More than half of the club’s beer sales last season were crafts, up from 40 percent in 2014, when the ballpark opened.
6. Atlanta Braves
Athens, Ga.-based Terrapin Beer Co., which was acquired by MillerCoors in 2015, brews on-site at the Terrapin Taproom.
7. Augusta Greenjackets (A)
Atlanta-based SweetWater Brewing has naming rights to the beer garden in the ballpark that debuted last month.
8. Pensacola Blue Wahoos (AA)
Admiral Mason Field
Bubba’s Sand Trap bar is named after one of the team’s owners, golfer Bubba Watson.
9. Jacksonville Jumbo Shrimp (AA)
Sam W. Wolfson Baseball Park
Intuition Ale Works brews the team’s Shrimp Boat Kolsch.
10. Miami Dolphins
Hard Rock Stadium
The taproom has more than 50 craft beers, and with more than 1,000 tap handles stadiumwide, Centerplate’s portfolio is one of the biggest in sports.
Source: SportsBusiness Journal research
“Our national craft brands — Leinenkugel and Blue Moon — are available widely. The other brands remain available on a more regional basis. As we expand the footprint of those regional crafts, certainly we’ll do it in stadiums and arenas as well.”
Maloney said that, for example, Georgia-based Terrapin (which MillerCoors acquired in 2016) was available at some Milwaukee Bucks games this season.
Additionally, the Terrapin Taproom opened last year at the Atlanta Braves’ new SunTrust Park, becoming just the fifth brewery to open at a sports venue. Maloney declined to provide specific figures, but he said “there was a significant increase in sales” in Terrapin products compared to what the brand had at Turner Field.
Not to be left holding an empty bottle, Constellation (the country’s No. 3 brewer) and Heineken (No. 4) also made significant acquisitions recently (see chart, Page 20).
And the smaller brands are still elbowing for tap space, and exposure.
In an effort to reverse a three-year slide that has seen its shipments decrease by 24 percent, Sam Adams, the country’s top-producing craft beer, this spring replaced longtime sponsor Budweiser as the official beer of the Boston Red Sox. Also, the Chicago Cubs and A-B entered into a multiyear marketing deal in 2013, giving Goose Island significant tap space as a result. Late last season, however, Heineken’s Lagunitas suddenly appeared at Wrigley as well.
The San Diego Padres, who have one of the most extensive beer offerings in baseball, boast seven sponsored beer areas in Petco Park: three by Constellation’s Ballast Point, two by Budweiser and one each by A-B’s Estrella Jalisco and Pacifico.
Although the craft brew craze has not been as noticeable in the college space, Colorado State broke the mold last year when its new Populous-designed stadium opened and included the New Belgium Porch, an open-to-all-adults craft beer area sponsored by the Colorado-based brewery.
“Early in the planning process, we threw out the idea that we could build a space that could be populated year-round,” said Myron Chase, the stadium’s project manager. “That sat on the shelf for about a year and a half. Even when talks resumed, it was just going to be a plaza. But in the fall of 2016 New Belgium expressed interest in being part of the building. We pulled the old imagery, and we modified to fit their branding.”
From the opening of the stadium last July through the end of this year, 40 events have either taken place or been booked at the New Belgium Porch, according to Paul Kirk, the school’s assistant athletic director for communications.
The growth of crafts does not appear to be subsiding any time soon, as teams scramble to build taprooms and expand bars.
For example, since becoming a sponsor of the Cleveland Indians in 2014, Great Lakes Brewery’s sales at Progressive Field have grown at a compound annual growth rate of 220 percent, according to Kurt Schloss, the team’s vice president of concessions.
According to a Levy spokesperson at Dodger Stadium, 10 percent of its 756 taps are devoted to crafts, a ratio that is comparable to last season. However, more than 19 percent of its game-day beer sales so far this season have been crafts, nearly double the rate they saw last season.
Additionally, Centerplate saw a 31 percent rise in craft beer sales at New Orleans Saints games last season.
But Kelly doesn’t think things will get any easier for anyone in the space, regardless of the scope of their capabilities.
“We’ve capped out as a category. It’s hard to justify upping investments. It’s hard to justify paying for exclusivity. We compete for retail space, we compete for stadium space. At some point, especially for the smaller guys, there’s a breaking point.”